Afrobeats is currently Nigeria’s biggest cultural export, but behind the global sold-out stadium tours lies a fragile financial ecosystem that is currently under threat. At the center of this storm is the Nigerian Copyright Commission (NCC) and a looming disbursement of copyright levy funds that has the industry’s biggest investors, the record labels, on high alert.

Here is why the current plan is causing panic among the people who actually fund the music:The "Middleman" Problem

The NCC is preparing to release funds from the Levy on Copyright, which is a fee collected on devices like mobile phones, USB drives, and memory cards to compensate creators for private copying. However, the Commission intends to route the music industry’s share through Collective Management Organizations (CMOs). The Record Label Proprietors’ Initiative (ReLPI), which represents powerhouses like Mavin, Chocolate City, Davido Music Worldwide (DMW), Universal Music, Digital Music Commerce and Exchange (DMCE), Sony, and Warner have all raised a major red flag: none of the existing music CMOs actually have a mandate to represent their sound recording interests.

A Crisis of Trust

The labels aren't just being difficult; they are protecting their investments.

• Record Label companies are the primary investors in the industry, bearing the costs of talent discovery, production, and international marketing.
• There are deep concerns regarding "governance and operational deficits" within existing CMOs, making them untrusted custodians for these funds.
• Routing this money through third parties without a clear mandate is described by ReLPI as "unjust, inequitable," and a threat to investor confidence.

Global Intervention

This isn't just a local dispute. International Federation of the Phonographic Industry ((IFPI), representing 8,000 record companies worldwide, has stepped in to back ReLPI. They have warned the NCC that distributing these funds through unrepresentative structures could lead to "irreversible prejudice" and violates international treaties like the WPPT and the TRIPS Agreement. The IFPI is calling for an immediate "pause" on disbursements until a transparent, "ring-fenced" accounting system is established.

The Legal Standpoint

The labels are standing on firm legal ground. Under Section 88(9)(d) of the Copyright Act 2022, right holders have the right to "opt out" of collective management. Furthermore, the Act allows the NCC to pay "other representatives of right owners," which is exactly what ReLPI is.

By ignoring these provisions and attempting to "compel" labels to join specific CMOs with history of "misappropriation of funds," the NCC risks alienating the very investors who keep the Nigerian music machine running. As ReLPI noted in their 72-hour ultimatum, fundamental principles of justice should not be "sacrificed at the altar of convenience.

EDITOR’S NOTE: 

1.  __Nigerian Copyright Commission (NCC)  is Nigeria’s government agency responsible for administering and enforcing copyright laws. It protects the rights of creators (artists, songwriters, producers, filmmakers, authors) by combating piracy, regulating copyright practices, approving CMOs, and ensuring creators receive legal protection for their works.
2. Record Label Proprietors’ Initiative (ReLPI) is an industry advocacy body representing Nigerian record labels. It focuses on protecting the interests of labels, promoting fair business practices, influencing copyright policy, fighting music piracy, and improving revenue collection and distribution for sound recording owners in Nigeria.
3. International Federation of the Phonographic Industry ((IFPI), is a global organization that represents the recording music industry worldwide. It works on behalf of record labels to protect sound recording rights, fight piracy, influence global music policy, publish industry reports, and ensure artists and labels are fairly compensated across international markets.
4. WPPT (WIPO Performances and Phonograms Treaty) is an international treaty administered by WIPO that protects the rights of performers and producers of sound recordings. It grants them rights over reproduction, distribution, and digital communication of their performances and recordings, especially in the digital and streaming era.
5. TRIPS (Trade-Related Aspects of Intellectual Property Rights) is a World Trade Organization (WTO) agreement that sets minimum global standards for intellectual property protection. It ensures that member countries (including Nigeria) provide legal protection for copyrights, trademarks, patents, and other IP rights, including those in the entertainment industry.
6. Collective Management Organizations (CMOs) are organizations licensed to collect and distribute royalties on behalf of rights holders such as artists, songwriters, composers, and producers. They manage public performance, broadcasting, and other usage rights, ensuring creators are paid when their works are used commercially. Examples in Nigeria include MCSN and COSON.
7. A copyright levy is a form of indirect remuneration for right holders, based on the premise that some acts of private copying cannot be licensed for practical purposes by the relevant right holders. A copyright levy is typically attached to certain products (equipment or blank media) that can serve to reproduce audio, audio-visual and textual material such as music, films or books.